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Broker-Dealer Fenix Fined $250K for Anti-Money Laundering and Registration Violations

By Mari Nicholson

Broker Dealer Fenix Fined 250K for Anti Money Laundering and Registration Violations

The Financial Industry Regulatory Authority announced that it has fined Fenix Securities LLC – a New York-based broker-dealer specializing in foreign investments – $250,000 for a series of violations, including anti-money laundering failures and the unregistered operation of foreign individuals.

From December 2016 through April 2024, FINRA reported that Fenix permitted 47 foreign individuals to conduct securities business using the firm’s systems, including accessing its trading platform and placing trades for customers, even though these individuals were not registered with FINRA. Additionally, during the same time period, FINRA said that the firm lacked a supervisory system reasonably designed to achieve compliance with FINRA requirements. Furthermore, from March 2018 through September 2018, the firm failed to disclose in trade confirmations that it paid transaction-based compensation to a foreign, unregistered entity for referring customer accounts.

The firm’s anti-money laundering, or AML, compliance program was also found deficient. From July 2016 through May 2022, the firm failed to establish and implement an AML program that was reasonably designed to detect and cause the reporting of suspicious activity. FINRA’s investigation into Fenix originated from a routine cycle examination of the firm.

In addition to the $250,000 fine, Fenix has agreed to a censure and an undertaking to remediate the identified issues and implement a supervisory system that complies with FINRA rules.

AML enforcement has been an important issue for FINRA and other regulatory agencies as of late. In September, FINRA fined Newbridge Securities $125,000 plus restitution for the firm’s failure to implement adequate anti-money laundering protocols, and, in August, FINRA fined a New York-based broker-dealer $225,000 for similar AML lapses. The U.S. Treasury Department also recently unveiled its final anti-money laundering rules for RIAs.

Fenix Securities LLC is a registered broker-dealer that provides clients with comprehensive, end-to-end trading solutions across major asset classes and global markets, including direct access to all U.S. equity and option markets. The firm is headquartered in New York, has one branch office in Buenos Aires, Argentina, and employs nine registered representatives.

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